The cash discount to the January Euronext.liffe contract narrowed to US$140-US$180 a metric tonne in Vietnam from US$190-US$220/tonne a week ago.

The benchmark January robusta contract on London's Euronext.liffe settled at US$1,651/tonne Thursday, down from US$1,715/tonne a week ago. The November contract settled at US$1,625/tonne, down slightly from US$1,670/tonne a week earlier.

"The weather was erratic -the rains earlier this week caused harvesting difficulties," which slowed drying of the beans, said a trader based in Singapore. "But the delays were minor."

Tropical Storm Noul hit Vietnam on Monday, bringing average rains to southern provinces, it was downgraded to a tropical depression early Tuesday.

Traders said they are still barely seeing any shipments from Indonesia, the world's fourth-largest coffee producer, since the warehouses of a major trading firm were seized by banks after it failed to meet its loan repayment obligations.

Meanwhile, buyers have turned to Vietnamese exports, traders said, so impact on the overall market was minimal, with the demand side "fairly normal."

In India, another major producer in Asia, coffee prices in dollar terms fell slightly, mainly because the rupee was weaker against the US dollar.

Robusta cherry AB was around US$1,975/tonne, down a tad from US$2,025/tonne last week. Arabica plantation grade A fell to US$2,700/tonne, down from US$2,750/tonne a week ago.

The Coffee Board of India said Thursday the country's coffee output in 2008-09 is estimated to fall to 276,600 tonnes, 5.6% off a post-blossom estimate of 293,000 tonnes.

The projected output reduction is mainly attributable to heavy monsoon rains in the southern state of Karnataka -and rain on the blossom day resulted in a berry drop, the board said in its post-monsoon crop forecast.

Arabica production is expected to total 90,050 tonnes, while robusta coffee output is estimated at 186,550 tonnes.

Dow Jones - November 24, 2008